Thursday, March 8, 2012

The Math of the Aftermath: What The Primary Looks Like Today

Consider this: if Mitt wins every remaining all-or-nothing state but one, and half of the remaining proportional delegates, he would likely still fall short of the magic nomination number of 1,144—which would force him to rely on unpledged delegates, the Republican version of the infamous Democratic super-delegates in 2008, to claim his party’s mantle.

Even if Mitt somehow won every delegate in every coming contest, he still wouldn’t clinch the nomination until Oregon’s primary on May 15.And if Romney musters only 40 percent of the proportional delegates going forward—equivalent to his share of the popular vote total to date—it would mean the first Republican race undecided when the convention opened in a generation.

Much of the punditry talks about how impossible it is for the not-Romney's to get to 1,144. And they're pretty much right—Santorum needs 968 of the remaining 1,541 delegates. Gingrich needs 1,039 of them. Paul needs 1,097. Sure, it's mathematically possible for them to get to 1,144, but it just ain't gonna happen.

But what they can do is prevent Romney from getting the delegates he needs, which would then give us that mythical creature called the "brokered convention." But that's just fantasyland. It won't happen.

...

If Romney can't close the deal at the California, New Jersey and Utah contests in June, he'll make a deal with one of the other candidates in order to cross the magic line, and it would happen before the RNC convention.

This dynamic has the predictable effect of everyone telling everyone else: "GET OUT OF MY RACE!" Most ironically, the Romney campaign says it would take "an act of God" for Santorum to get enough delegates to win. Well, yeah: That's Santorum's whole gig, Mitt. Did you not get the memo?

My Conclusion: Nobody is ready to quit (except maybe Newt Gingrich--but he's fueled by hate for Romney and will likely not cut a pro-Romney deal ... which is the only deal that would accelerate things to a close).

Point 2: The Race Gets More Expensive and so More Negative
To put the fallout from the race in perspective, here is a visual (from Wikipedia) of the coming schedule:

The states following March are supposed to be Winner-Take-All which is supposed to drive to a quick finish (although apparently Santorum is currently ahead in Texas--which would not indicate a quick wrap should he win it). However in the case of California--the biggest single prize--it seems that while each district is winner-take-all you can win and lose some districts. This, effectively, carves up the largest turkey which probably ought to all go to Mitt.

The key takeaway here is that the big fish: Texas, California, New York, and Pennsylvania all come towards the end of the cycle. This rear-loading of delegate heavy states mean that the possibility of having a brokered convention will not be clear until May or maybe June. With the RNC convention in August, that's pretty much a nail-biter.

Additionally, for already cash-strapped Mitt Romney, these coming states have some of the most expensive media markets in existence. So even as late as May the bleeding could continue.

This time-table combined with the 2500.00 USD limit on to-the-candidate donations means that in order to keep up the required spending (and Romney seems committed to a 2:1 or 5:1 ratio) more and more people will have to donate to Super PACs as their traditional donors hit their limits. Slate tackles the question of where you should donate: Candidate or SuperPAC?

They conclude it doesn't make much difference to the average donor--however there are some major concerns:

Candidates buy air-time more cheaply than SuperPACs making small donations less effective

SuperPACs are more likely to launch negative ads so if the race gets more and more negative (which seems likely) they may find small donors turned off and less willing to fund the attack machines

The billionaires who are donating millions and millions to SuperPACs are, I think, for the most part not like average citizens who are giving a few dollars here and there (or a few hundred once per campaign cycle) to a candidate they like. No--these guys--the big guys--are making investments. That means they are buying something for their money: influence. As the campaign rolls on candidates may find that they have less influence to "sell" because if I am considering contributing 20MM to Romney's SuperPAC I have to consider that I am buying 'shares' in a candidate who has already raised 100MM or so from other billionaires who may have conflicting interests to me--or I may simply not know what their agendas are.

Furthermore: one a candidate drops out the SuperPAC becomes a 'zombie SuperPAC' which can do all kinds of things with the money (including, for example, buying a yacht!). This should rightly concern anyone who is thinking about donating a huge sum of money to a candidate who may not win: that money could go anywhere after their candidate falls.

Although the funds available for SuperPACs are theoretically almost limitless (we could easily see a 100MM dollar spend from Gingrich's backer Sheldon Adelson) it is likely that even for these super-wealthy donors they will be holding on to some cash for the general election. As a result, for example, Romney's Out-Spend-Out-Attack-Out-Last strategy could run into trouble.

Final Point of Conjecture: I cannot determine exactly how the spending pattern of negative ads is trending but I suspect that it is increasing over time by state (although it almost certainly spiked in Florida). Certainly on a per-SuperPAC basis Romney's machine is spending more money more quickly than the other candidates and is more negative (as of Feb 22):

Data show that super PACs, which have run more advertising than the campaigns themselves, have spent 72 percent of their money on negative ads. The figure for campaigns is 27 percent, according to a Washington Post analysis of data from Kantar Media/Campaign Media Analysis Group, which tracks television advertising across the country. (For this article, ads were considered negative if they mentioned another GOP candidate.)

Super PACs can accept corporate money and personal checks above the $2,500 limit on donations to campaigns, but they are prohibited from coordinating ads with the campaigns they are trying to help. That makes it harder for the PAC spots to feature candidates. And because stock footage and voice-overs can be dull, the result has been more negative ads.

My Conclusion: No one can say with certainty how the fund-raising will hold up over this time or what the effective impact will be on the race however I believe that as the campaign goes on SuperPAC spending will outpace candidate spending and, unless trends change, increase negative ad percentages.

It would undoubtedly still help Mr. Santorum if Mr. Gingrich dropped out — especially if Mr. Gingrich endorsed Mr. Santorum and asked his delegates to vote for him. In fact, the combined total of Santorum and Gingrich delegates right now is quite similar to the number that we calculate Mr. Santorum would have won without Mr. Gingrich in the race.

But that would be just the first step for Mr. Santorum — at best, a necessary but not sufficient condition for a comeback. He’ll need to find some further means by which he can eat into Mr. Romney’s coalition, and he’ll need to do so in a hurry since 21 states have already voted.

This holds equally true for every other candidate: Romney, if trends continue--and no one quits--will be facing either a contested convention or, at very least, a hugely expensive (and possibly very damaging and exhausting) summer of battle. Just as Newt Gingrich is floating a "cheerful" approach with a focus on 2.50-gas, is trying something new so will the other candidates have to (except for Romney who may simply try to outspend and destroy the other candidates--a strategy that has been arguably successful).

The most likely possibilities I see for Santorum are:

Ask for a spot on the ticket (not especially likely--but in a month Romney might be ready to deal)

Go Against Obama. If Romney stops running attack ads he'd save a lot of money and he could try focusing on Obama at this point. Yes: it's a huge risk--but--if he feels there really is no way for Santorum to overtake him, he can try a rope-a-dope strategy and just run out the clock planning to limp over the finish line and, by being full-on-positive pick up some Gingrich voters.

The most likely possibilities I see for Ron Paul are:

Keep doing what he is doing--I don't see the impact he's having on the race. He's yet to win a state, he has disappointed in places he was predicted to be strong (North Dakota) and he should get to influence the convention as is.

Scattershot: if he attacks all the other candidates evenly he can put to bed some of the theory that he is intentionally helping Romney. This might actually be a decent use of his money as his base would appreciate it.

Conclusion: I would look for some major changes in approach over the next 20 days. Let's see if I'm right!